Biden's Rent Control Proposal Would Screw Over Americans Looking for Affordable Housing

While political pundits are focused on President Biden dropping out of the race, I want to turn attention to a policy that Biden proposed last week: nationwide rent control. Biden is urging Congress to put a 5 percent cap on rental units for landlords with over 50 rental units with the threat of losing depreciation write-offs. The reason for this plan is because Biden wants to "make renting more affordable for millions of Americans." For Biden, affordable housing is part of the American Dream. With affordable rent being more out of reach for millions of Americans, Biden believes that rent control is the solution. While his proposed rental cap would only exist for two years and not apply to all landlords, it is still enough to do damage that would be counterproductive to the goal of making rental units more affordable. 

Forget for a moment that Biden nothing to tailor the policy to local marketing conditions and simply imposes a blanket cap. Rent control is a disaster policy that hurts those that it was meant to help. I first wrote about rent control in 2014 when I pointed out the macroeconomy theory of rent control and price ceilings, as well as how that has resulted in multiple unintended consequences. It was only last month that I analyzed a meta-study on rent control that illustrated the following costs of rent control:

• Reduces housing mobility
• Makes non-rent-controlled property more expensive
• Constricts housing supply because of disincentive to create new housing, which worsens affordability
• Disincentivizes rent controlled-property upkeep, which means more people living in property unsuited to their needs
• Decreases property value, which not only hurts the value of the rental unit, but also the neighborhood

Apparently, Trump is not the only president to descend into economic lunacy. Rent control has been discredited by economists on all sides of the political spectrum. The fact that Biden proposed this could suggest he was trying to buy votes just as easily as illustrating how much more political clout the extreme Left has in the Democratic Party. Exploiting economic ignorance is not a solution to rising housing costs. 

Thankfully, Biden needs Congressional approval to pass this nightmare (although it is possible to skirt the filibuster by making this proposal part of the tax code). Plus, Biden has bigger issues to deal with now than a housing proposal that is very unlikely to pass. If we care about increasing affordable housing, the focus should be on making it easier to expand housing supply, not policies that will further contract it. As the Cato Institute brought up in its recent analysis, allowing for homebuilders to construct more housing could easily reduce housing prices by 50 percent. Whether the next President realizes that reality of the housing market remains to be seen.